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The Importance of Market Research

As fate would have it, the Northern Arizona Center for Entrepreneurship and Technology (NACET) was discussing this new, monthly business column during a recent staff meeting. We’re proud to have this space that you’re reading and, naturally, feel the need to get out of the gate with a relevant, timely piece.

With the deadline looming in the background, we were working on our big whiteboard in the foreground. In brightly colored marker, we listed our programs – circled some, underlined others and added asterisks next to a few. We took a critical look at each one of our programs and their role in helping clients succeed.

Some programs lead our clients to critical local and national connections (e.g. funding, mentors, colleagues, etc.). Others shorten the learning curve or help solve specific problems, quickly (e.g. marketing, sales or staffing.)

We asked ourselves three questions time and again as we ran through the list: Who are our clients? What matters to them today? What will matter to them tomorrow?

Our clients are entrepreneurs and rapidly growing businesses. They’re start-ups and long-time tech pioneers. They’re idea people and titans of industry. And they share one common need: Customers. Every successful business needs customers.

We continuously challenge our assumptions about our own customers and problems, as we did that day on the whiteboard. During that meeting, the subject of our first column was born: How do any of us reallyknow our customers?

The answer is market research.

The ability to objectively collect and analyze market data (market research), and honestly compare the idea against the research (market validation) can be the difference between success and failure. Market research looks at real data – not just anecdotes – about potential customers, the way they experience the problem, and the value they place on the solution. It also looks at competitors and assesses their strengths, weaknesses and approaches.

Mark Goldstein, president at International Research Center, and future presenter for NACET, helps emerging and transforming technology companies conduct market research. He explains that there are two main types of market research: 1) Primary research in which a company actually gathers the data from questionnaires, surveys or interviews and 2) Secondary research in which a company relies on existing data that someone else gathered.

“Market research is comparable to training for a race,” Goldstein said. “Sure, you could sit on your couch all day, but you wouldn’t be prepared for a triathlon. And the odds are that another competitor is better prepared. Entrepreneurship is an endurance sport. And market research is absolutely critical to get to the finish line.”

Professional researcher and NACET Mentor, Jan Knight, president of Bancroft Information Services, agrees. She presented a workshop at NACET in February to help entrepreneurs conduct market research beyond simply “Googling it.”

Knight and Goldstein recommend a variety of techniques to gather better data, including “advanced” Google searches, research subscriptions, patent searches, press-release reviews, and social media.

Goldstein adds that social media and online availability of information has been transformative, but that’s not where market research ends. That’s just the beginning.

He describes market research as a pyramid. On the bottom is data, which is collected and turned into information. Information leads to knowledge, which leads to insight. And ultimately, the best market research leads to strategy, which is at the top of the pyramid.

“Market research and business intelligence are not [just] about what competitors and markets are doing. It’s about what competitors and markets will be doing. To be successful, you must predict their likely strategies and moves,” Goldstein said.

Knight agrees. “Validating the market is more than market sizing and competitive research. Often missed is what’s happening in the industry now, and what’s forecast for future. Just knowing what ‘used to be the case’ in an industry isn’t going to help when new regulatory or demographic issues are about to disrupt the industry as you currently know it.”

Hence our whiteboard at the NACET staff meeting. We used market research about our clients to develop programming for the future. And we’ll help our clients do the same. FBN

For more information on market research or NACET, please visit NACET.org or call 928-213-9234.

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